US soy stocks to drop to less than 16 days' supplyBy Agrimoney.com - Published 11/12/2012

Soybeans represent "the story" in the grains and oilseed complex,
a leading commentator said, after US farm officials cut hopes for supplies,
citing bigger estimates for the domestic crush.

The US Department of Agriculture, in its benchmark Wasde
crop report, lowered by 10m bushels (270,000 tonnes) to 130m bushels (3.5m
tonnes) its estimate for US soybean inventories at the close of 2012-13.

The downgrade reflected an increased estimate for the US
soybean crush, after a series of strong monthly data from industry group the
National Oilseed Processors Association, which unveils its next data on Friday.

The crush has been supported by firm margins, supported by a
strong period for US exports of soyoil, which is becoming hard to come by in
top exporter Argentina after the poor soybean harvest earlier this year.

'Story is about
soybeans'

The fresh stocks estimate put US inventories on course to
end 2012-13 at their lowest in nine years.

Wasde soy stocks data, end 2012-13, change on last and (on market forecast)

US stocks: 130m bushels, -10m bushels, (in line)

World stocks: 59.93m tonnes, -90,000tonnes, (+500,000 tonnes)

Compared with demand, in the key stocks-to-use ratio, they
will close at 4.3% of consumption, equivalent to less than 16 days' supplies,
and the lowest in nearly half a century.

"That's the lowest you could be with setting off serious
price inflation," said Sal Gilbertie, president of Teucrium Trading, an issuer
of commodity-based exchange traded products.

"The story is about soybeans. The balance sheet remains very
tight," he said, noting "insatiable" demand from China, the top importer, for
the oilseed.

The USDA separately announced the sale of 115,000 tonnes of US soybeans to China.

Soybean futures for January lost ground despite the stocks
downgrade, which was in line with market forecasts, shedding 0.2% to $14.72 ¼ a
bushel in Chicago for March delivery.